Stocks in Asia were muted on Friday afternoon ahead of the release of the U.S. nonfarm payrolls report, which may provide clues as to whether the Federal Reserve will cut interest rates at its July monetary policy meeting.
In Japan, both the Nikkei 225 and the Topix were fractionally higher.
Meanwhile, South Korea’s Kospi traded slightly lower, as shares of industry heavyweight Samsung Electronics fell more than 1% after reporting that second-quarter profit likely dropped 56% as compared to a year ago.
Australia’s S&P/ASX 200 added 0.51% as most of the sectors traded higher.
Mainland Chinese stocks were mixed by the morning session’s end, with the Shanghai composite down 0.18% and the Shenzhen component adding 0.22%. The Shenzhen composite was higher by 0.102%.
Over in Hong Kong, the Hang Seng index was fractionally higher.
US payrolls anticipated
Investors will be awaiting the release of the nonfarm payrolls report stateside later in the day, with expectations for U.S. private payroll employment to have grown by 153,000 in June, according to economists in a Reuters poll. That compares to a figure of 90,000 from the previous month. Total non-farm employment is expected to have changed by 160,000.
A weaker-than-expected figure from the upcoming payrolls report could increase bets that the Fed will cut interest rates at its meeting on July 30 and 31. The central bank opened the door to easier monetary policy last month by stating it will “act as appropriate” to maintain the current economic expansion.
“A number in line with expectations is unlikely to deter market expectations for a Fed funds rate cut at the end of July,” Rodrigo Catril, senior foreign exchange strategist at National Australia Bank, wrote in a note.
“To some extent the Fed’s debate is really about whether a 25 or 50 (basis point) rate cut is in the offing and a soft print will most likely encourage the market to increase its expectations for a 50 (basis point) cut,” Catril said.
On Wednesday, a report from ADP and Moody’s Analytics showed private payrolls rising by 102,000 in June.
One investor told CNBC that Wednesday’s private payrolls figure “corroborates the broader weaker numbers” that have been released recently.
“It basically points to a … deceleration in the global economy which is one of the reasons why expectations now are … for rate cuts this year.” said Daryl Liew, head of portfolio management at REYL Singapore.
Currencies and oil
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.754 after seeing levels around 96.3 earlier in the week.
The Japanese yen traded at 107.83 against the dollar after weakening from levels around 107.7 yesterday, while the Australian dollar changed hands at $0.7025 after slipping from levels around $0.704 in the previous session.
Oil prices were mixed in Asia morning trading hours, with the international benchmark Brent crude futures contract flat at $63.30 per barrel, while U.S crude futures slipped 1.01% to $56.76 per barrel.
